All posts by Sean Upton-McLaughlin

Sean is a business and communications professional based in Shenzhen, focused on China, culture, and cross-border work. His writing explores how language, incentives, and organizational structures shape real outcomes when Chinese and overseas teams work together.
BUSINESS IN CHINA, WORK IN CHINA

Your “China Problem” Isn’t Culture. It’s Operations.

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Recently, I sat down with a group of global executives visiting Shenzhen. They wanted to understand China Speed. I told them that was the wrong question. The real question wasn’t what China Speed is. It was why it exists, and what it means for how their own organization needs to operate.

That conversation reflects how most overseas businesses approach China. They focus on big concepts like culture, China Speed, and the Chinese way of doing things. And they frame the gap as something to study or overcome, not something to operate inside.

But framing it that way turns a practical business problem into something that feels permanently out of reach.

The Misdiagnosis: Culture Can’t Be Solved

Framing China business challenges purely in terms of culture turns what should be practical business problems into near-insurmountable dead ends. Here are a few examples:

Culture is too opaque: Chinese culture consists of thousands of years of history. Even locals and experts don’t know it all. There’s no time for businesses to learn everything in ways that meaningfully impact short-term business timelines.

Culture is too foreign: Chinese business culture often feels like the complete opposite of how overseas businesses feel comfortable operating, and it’s often framed as either the right way or the wrong way. It’s therefore no surprise that many overseas businesses have alternated between pushing a “global” playbook in the Chinese market or handing everything over to local teams and hoping for the best.

Culture is too personal: Culture doesn’t sound like anything that can be part of a global or local business strategy. It’s therefore not surprising to see the “Chinese Business Culture Problem” pawned off on individual business leaders or managers. And learning about Chinese culture online is no way to solve business problems in the here and now.

So if “culture” isn’t the answer to solving China’s business challenges, what is?

The starting point is understanding that Chinese companies aren’t doing things differently because of who they are. They’re doing things differently because of the environment they’re operating in, and their choices are rational.

The Reframe: It’s Operational Logic

During the conversation with the overseas executives in Shenzhen, I reframed the culture argument this way: “Chinese companies don’t move fast because of their culture. They move fast because their competitive environment exerts specific pressures, which force Chinese companies to make specific, rational operational choices to compete and survive.”

That’s not to say that culture plays no role. The difference is that culture helps to understand China, but it does not help drive shorter-term business decisions.

Chinese companies, teams, and professionals usually have very logical reasons for acting the way they do, whether it be the most practical way to make money, staving off competitors, maintaining internal unity or teamwork, or protecting one’s career.

Here’s how I’ve seen the Chinese operational logic play out:

CEOs pivot fast and kill what isn’t working. I’ve seen Chinese CEOs pivot carefully planned marketing campaigns in less than two days when a competitor moved early. There was no discussion, no alignment meeting, no cross-functional sign-off. From the outside that looks chaotic. From the inside, it was completely rational: The window was closing, and waiting for consensus would have meant missing it entirely.

Companies run parallel teams deliberately. I’ve seen Chinese tech companies use parallel teams not just to move faster, but to raise internal standards. Two teams working simultaneously on the same problem, both knowing the other exists. No announcement, no explanation. A second team simply appeared. Everyone understood what it meant. The standard had been raised without a single difficult conversation.

Even small businesses operate this way. And I’ve seen a single-person gelato shop in Shenzhen create over 200 flavors in two years (roughly two new flavors every week) specifically designed for the local palate. Not as a marketing strategy. As a direct response to a consumer standing in front of her asking what’s new. If one person with no budget operates this way, consider what a well-resourced local competitor can do at scale.

All of these actions look and feel strange or wrong from the outside. But they make sense on the inside. Viewing them as culture doesn’t help overseas companies change or adapt. Viewing them as rational operational choices within the Chinese context does.

The Complication: Adaptation Has a Ceiling

Culture can’t be changed or adapted to. Not really. And not by organizations. Many global organizations may have China teams made up of highly-skilled Chinese professionals. But they’re still reporting to overseas HQs that use overseas logic and cultural norms. And while they are Chinese, they are still operating within a foreign system.

Overseas companies also have more considerations, stakeholders, and rules than many of their Chinese competitors do. They have to consider how their actions may be perceived by people across many countries and cultures. Many local competitors just have to think about one.

That’s one reason why “just follow local culture” or “let a local China team or partner handle everything” rarely works out. If you completely separate a local China operation or partner from your own business logic and needs, they’ll only make decisions about what makes sense in a purely Chinese context, without regard to how it might affect your global business.

A core question overseas business leaders should ask is: Are you actually trying to fix operational challenges for China, or simply push the adoption of global operational methods in China? One helps you operate effectively in China. The other is pushing a system that makes you feel comfortable but may not work in the local context.

The question isn’t how to copy the model. It’s understanding the operational logic well enough to find what actually works within your constraints.

The Implication for Western Leaders

The signals on the ground are usually already there. Local Chinese team members will already know what is going wrong. And local partners will already understand how the competitive landscape works.

The challenge is when those signals can’t be heard. I remember an agency pitch from several years ago, where my team briefed an overseas executive based in China on new local shopping trends and how they were changing retail in China.

His response? “That’s not the way we do things here.”

When operational signals and local needs are coming through loud and clear, but overseas businesses are either unable to hear them or unwilling to act on them, the culture framing just becomes another reason to dismiss what the market is already telling you.

The question isn’t whether your China team or partner understands the market. It’s whether your organization is designed to listen to them

If you’re interested in thoughtful perspectives on China, cross-border work, and how culture, incentives, and organizations shape real outcomes, you’re welcome to subscribe to China Culture Corner and receive future posts by email.

I also share related ideas and longer-form video commentary on LinkedIn and YouTube, and post updates across the channels linked above.

If you or your organization is navigating China execution or cross-border alignment challenges, I work with teams on an embedded and remote basis. Reach out directly: Sean@SageSightConsulting.com

BUSINESS IN CHINA

Why China Keeps Winning: Four Gaps Overseas Executives Miss

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Overseas companies are simply not ready for competition from China. For years, China was regarded as the world’s factory, allowing overseas companies to offer high-quality, low-cost products in their home markets.

But Chinese companies have quietly continued to improve their capabilities, increasingly becoming able to compete with overseas companies in China and in overseas markets.

You might remember iRobot, the maker of the Roomba, the first autonomous vacuum cleaner. Not only did the company recently declare bankruptcy, but they were later bought by its own Chinese supplier. This segment is now dominated overseas by Chinese players, including Roborock, Ecovacs, Dreametech, Xiaomi, and others.

In China, overseas brands are also under assault. Starbucks has continued to lose market share to local rivals like Luckin and Cotti. Nike and Adidas are facing competition from local brands. And various overseas fast fashion brands closed their Tmall stores, unable to keep up with local rivals. They all assumed their global brand equity would protect them. It didn’t.

This challenge will only increase for overseas companies, especially for those companies that do not diligently work to close the gaps that leave the door open for hungry Chinese companies that see larger, slower overseas competitors as easy targets.

I’ve spent 15 years operating inside Chinese organizations. In that time, I’ve seen four strategic gaps that impact overseas companies when competing with China. These gaps impact how they plan (or don’t) for competition from Chinese companies in China, as well as their home market: Perception, speed, assumptions, and talent.

Overseas companies that do not actively work to close these gaps will not simply fail to grow in the China market. They will also present opportunities for growth for ambitious Chinese competitors in their home markets.

The Perception Gap

What overseas companies and executives think is happening in China, and what is actually happening, is often very different. This results from not having eyes on the ground and only paying attention to surface information without diving deeper.

Being on the ground in China can be helpful for companies aiming to close their own perception gaps, but it’s not enough. It’s not just about having eyes in the right places. It’s also about having the people who are willing to go where others will not, and report uncomfortable truths to HQ management.

I’ve looked at this directly in two sectors – drones and robotics. In both cases, the surface signals failed to convey actual usage cases, and where Chinese tech companies were choosing to concentrate their efforts.

With drones, it’s common for tourists and executives visiting China to gush over the high-tech coffee and food deliveries made possible by delivery kiosks all over cities like Shenzhen. But the reality few talk about is how this is not a viable business – Meituan is focused on last-mile delivery with drones – coffee deliveries are simply good PR and a way to further refine drone systems.

Robotics is another high-tech sector in China that markets and tests publicly using spectacle, but is selling something completely different. Robots serving tea at expos are, in fact, being trained for lab work. Robots being displayed using musical instruments are being trained to handle machine parts. The truth is clear and obvious, but only for those who take the time to look.

The lessons from this type of perception gap should already be clear. When overseas companies and markets do not pay attention to the developments being made by Chinese companies, often done in the open, companies are not prepared, and markets and analysts are shocked.

We’ve seen this happen time and again with breakthroughs, including Huawei’s advanced chips, BYD’s electric vehicles, and DeepSeek’s AI. Other industries will follow. The only question is whether overseas companies are watching.

The Assumption Gap

It’s one thing to not understand what’s happening in China, far away from your home markets. It’s quite another to not understand your own consumers, what they want, and how their tastes might evolve to prefer offerings from Chinese competitors.

This shift has been going on for years in the domestic China market, with Chinese competitors gaining an edge with domestic consumers over global brands. And it’s not that this represents some form of nationalism or anti-global bias. It’s simply that Chinese companies can now offer products at a quality level as good as overseas brands, at lower or comparable prices, while also adapting faster to what local Chinese consumers want.

We’ve seen this with brands like GUESS, which shuttered stores across China, which was selling an Americana chic style at a price point Chinese consumers weren’t interested in. We’ve also seen it with Starbucks, which was surpassed in terms of the number of stores in China by Luckin in 2023.

I recently sat with a group of overseas executives visiting China and watched a familiar tension play out. They were so focused on what they thought their brand should be that they couldn’t see what local consumers actually wanted or how they thought about brands in the local market.

This tension is common for all global brands operating and selling in China. Multinational HQs are used to thinking in terms of global brand playbooks and global brand equity, leading to sales in international markets. But this approach increasingly does not work in China, where consumers move fast and increasingly want products built for local tastes.

Not understanding how incorrect assumptions shape China market strategy can lead overseas executives and HQs to assume they are losing in China because the market is “hard” or because there are cultural elements beyond comprehension. But this simply hides the real problem.

For now, this phenomenon of Chinese companies outperforming overseas competitors in understanding consumers’ needs is largely confined to the domestic China market. But that doesn’t mean it will remain there.

The Speed Gap

Chinese companies move very fast, launching new products in less time than it takes overseas companies to bring on a new senior hire.

But it’s not just chaos. There are several layers that both help and force Chinese companies to move fast: Infrastructure and government support, market pressure, and operational and structural choices.

For infrastructure, China’s intentionally designed industry hubs concentrate talent and manufacturing expertise, while using economies of scale to produce and sell at lower costs. Informal information networks between manufacturers also allow different companies to jump on new trends far faster than overseas competitors.

Government policies subsidize industrial parks, provide preferential lending, and provide quicker regulatory approval for new categories compared to overseas markets.

Market pressure also plays an important role. The China market has long been saturated with local players, leading to hyper competitiveness, as well as involution (a continuous vicious cycle of price cutting), which the Chinese government has taken a more active role in combating it.

But additional factors push that speed further. Not only do Chinese consumer trends change faster than in many other markets, but China’s digital e-commerce and social shopping closed ecosystems mean that companies can now view, analyze, and act on consumer behavior and feedback in real time, forcing other companies to try to move even faster to keep up.

This speed in the domestic China market has led to Chinese companies making decisions on their operational models to move faster, not just to grow faster, but to simply survive. It may look chaotic on the outside, but they are entirely rational on the inside.

This overall rapid execution speed, not just in manufacturing, but also in sales, marketing, and overseas expansion, presents a real challenge to overseas companies. Multiple Chinese competitors are now leading in consumer electronics and other industries overseas. And more competitors are also viewing overseas markets as new growth areas to escape the competition back home.

Overseas companies face a clear dilemma. Their Chinese competitors not only produce similar or better products than they do, but also do so more quickly and at lower prices. The gaps where overseas companies can potentially compete are narrowing, and overseas companies can no longer remain on the sidelines. Overseas companies can no longer treat this as someone else’s problem.

The Talent Gap

Having the right talent to remain competitive with China is not simply about having smart people who understand China.

After all, many overseas companies have smart, well-educated China teams with deep local experience. But the China team may not be giving the HQ the information it needs, or not moving as fast as local competitors.

In these cases, overseas companies’ China teams are often not working inside the “Chinese system” – they are working inside the “overseas system” with Chinese characteristics.

Overseas HQs that need to approve everything slow down execution and rob local teams of decision-making authority. At the same time, there are many reasons why local China teams might not share the full picture with overseas HQs.

In China, it is common to manage upwards information flow, and this will be intensified when overseas HQs react badly upon learning uncomfortable truths about the China market.

When looking at overseas HQs, it is also common for executives and teams to be incentivized to act in accordance with overseas logic and tempo, instead of China-side speed and logic.

So on one hand, it’s certainly important to have smart, skilled people, both in the HQ and in China. But it’s also vital to ensure both have the incentives and support to act in ways that support the growth (or slow the decline) of the China business.

Sometimes this requires organizational change. Sometimes it requires bringing on outside partners who understand the needs of both sides, where execution, communication, and collaboration break down, and who can say things neither side feels free to.

What overseas HQs urgently need are China teams that can act with authority in accordance with the needs of the China market while communicating clearly with HQ. Repeating the playbook that worked before is simply asking for failure.

How Leadership Can Close These Gaps

These gaps don’t exist in isolation; they compound. A company that misreads what’s happening in China will make decisions based on wrong assumptions. Wrong assumptions then slow the organization’s ability to respond closer to China’s speed. And without the right people in place, people who can operate across both systems and say what neither side feels free to say, none of it will get fixed.

This is not about copying the Chinese approach. It is about understanding that Chinese companies across many industries have spent decades being forced to move fast, iterate constantly, and compete with no margin for error. Many now have the capabilities to compete directly with overseas companies, in China and in their home markets.

We’ve already seen the effect across sectors in China and overseas, where overseas companies were the traditional leaders. Automotives, luxury, consumer electronics. All are facing significant challenges from Chinese players, and the competitive gap has closed faster than most planned for.

Organizations that have not yet adapted are finding that the window to do so is closing fast. Surmounting these gaps requires honest answers to uncomfortable questions about what is actually happening on the ground, whether internal assumptions reflect market reality, and whether the right people are in place to bridge both sides. Those answers rarely come from inside the organization alone.

If you’re interested in thoughtful perspectives on China, cross-border work, and how culture, incentives, and organizations shape real outcomes, you’re welcome to subscribe to China Culture Corner and receive future posts by email.

I also share related ideas and longer-form video commentary on LinkedIn and YouTube, and post updates across the channels linked above.

If you or your organization is navigating China execution or cross-border alignment challenges, I work with teams on an embedded and remote basis. Reach out directly: Sean@SageSightConsulting.com

BUSINESS IN CHINA, WORK IN CHINA

What ‘On the Ground in China’ Actually Means, and Why It Matters

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Many cross-border business professionals emphasize being “on the ground” in China, but what does this term mean, and how does it really help overseas companies in the China market?

After all, an overseas tourist or student in Shanghai is technically on the ground in China. So is an overseas professional who speaks the local language and has been working in the country for 30 years.

The key is understanding the degrees in between, and how different types of on-the-ground experience provide different benefits to overseas companies in the China market.

Based on my own 15 years of experience operating in China, I’ve mapped out five distinct levels of being ‘on the ground.’ In the following sections, I’ll break down what each level provides and where its limitations lie.

Level 1 – Viewing China from a Distance

When overseas HQs don’t visit China or have someone trusted on the ground, it can be hard to know what to believe.

While geopolitics and slanted news headlines can provide misinformation and lead to knee-jerk reactions, it is more common for differences in language, culture, and business practices to take a higher toll.

When dealing with China from a distance, overseas HQs can’t tell what information is being filtered, what consumers, partners, and clients really expect, and how best to align operations across markets.

It’s a risky proposition to be in, especially amid geopolitical uncertainty and the increasing competitiveness of local competitors.

Level 2 – Visiting Short Term

Short-term visits can be a marked improvement on having no presence in the China market, whether they be business trips, China innovation tours, or regular travel.

Not only do short visits allow overseas professionals to see China’s development up close and firsthand, but they also help false assumptions fall away.

The scale, pace, and context of China become more obvious, which is hard to grasp from overseas news headlines or social media alone. Even brief exposure is better than forming opinions entirely from a distance.

It’s also much easier to do business and build relationships with many Chinese professionals and companies face-to-face. Doors that might be closed over a Zoom call could open during a multi-week visit.

That being said, short visits don’t do all that much to further your understanding of China, or your ability to communicate effectively with Chinese professionals and companies.

It’s also common for Chinese professionals, both those who work for your China office as well as local companies, to not always be able to share the actual situation and challenges right away. A certain amount of trust and camaraderie needs to exist first.

So, short visits are certainly an improvement over handling everything online or via an agent you don’t really know. But they also can’t replace having a more solid and trusted presence in the market.

Level 3 – Living in China

Living in China long-term is a clear step up when it comes to understanding China, how Chinese people think, and the cadence and rhythm of daily life.

Daily routines replace novelty, and overseas professionals experience public spaces, services, friction, and convenience as part of normal life, rather than observing them from the outside.

This shift from observation to participation matters. When systems become part of your daily rhythm, you stop reacting to isolated moments and begin noticing patterns.

Certain behaviors stop feeling surprising. Others become more noticeable precisely because they repeat across situations, industries, and cities.

Professionals begin to internalize how decisions are made, how trust is built, and how expectations are signaled indirectly. They begin to sense when something is unsaid but understood. Context becomes intuitive rather than intellectual.

At the same time, this level still has limits. Even after years of living in China, if you are not working inside organizations, much of what is understood remains external.

You may understand consumer behavior, service expectations, and social norms, but not yet the internal pressures, tradeoffs, and incentives shaping business execution.

Even so, this stage reshapes perception in meaningful ways. It reduces overconfidence, challenges assumptions imported from overseas, and begins to narrow the gap between surface impressions and lived reality.

Level 4 – Working in China

Working in China, specifically within an organization, adds another layer of learning, as well as complexity.

At this level, it makes less of a difference whether a professional works for a Chinese company or an overseas one. After all, most employees will be Chinese, speak Chinese as their native tongue, and have their behavior shaped by Chinese culture and society.

In a professional environment, overseas talent will have the opportunity to begin understanding internal and external incentives, tradeoffs, internal pressures, and constraints. All in a Chinese cultural context.

They can also begin to see how certain overseas methods and ideas do not always fully land in the China market, and why local practices can make more sense.

And they can observe how different speeds and expectations, as well as what’s left unsaid, can lead to increasingly unaligned efforts between overseas HQs and local offices.

At this stage, it becomes much harder to assume intent equals outcome, or that global best practices automatically translate to the China market.

This leads to what matters most — overseas professionals actively looking for the right balance between global needs and local realities.

Level 5 – Deep Inside Chinese Organizations

This last level, based on my own experience in China, is the most complex. It is also more difficult to obtain proficiency in.

When overseas professionals work within Chinese-owned and managed organizations, they find that things are much more opaque and that they often have less institutional support than they would in an overseas-run environment.

First of all, it is not uncommon for most employees to only speak Chinese, and for company documents, communication platforms, and systems to be completely in the Chinese language.

To be truly able to manage across teams and understand nuance, overseas professionals will find that Chinese language skills are a requirement.

Second, while overseas employees will likely still be treated warmly inside Chinese organizations, they often will not experience the same level of deference as they might working inside an overseas company in China, especially one from their home country.

This requires the capabilities to bargain and convince colleagues and managers to accept new ideas, in an environment where the overseas approach is not the status quo.

Third, they will have to deal with internal vs. external trust dynamics, siloed organizational structures, opaque decisions from leadership, and less freedom to share their own ideas.

This requires developing the capabilities to read the room in a Chinese context, respect Face, protect internal relationships, and understand what is not being said.

Despite the difficulties, professionals with these capabilities are genuinely rare and disproportionately valuable to overseas companies navigating the China market.

They can help overseas HQs to better understand the China market, their own operations, and challenges in the country, and how to better align and execute together.

What This Means for Overseas Leaders

The most important thing overseas HQs and executives should understand is that, despite China’s increasing internationalization, their Chinese staff and partners are still operating within a Chinese cultural and organizational context. That shapes everything.

When overseas HQ teams visit China operations, they rarely get a full picture of what’s actually happening. This isn’t because Chinese teams are being evasive. It’s structural.

The cultural instinct to protect relationships, avoid escalating problems prematurely, and present things smoothly to visiting leadership means that candid feedback rarely travels upward naturally, even in offices run by overseas professionals.

The same applies in reverse. When Chinese companies partner with overseas organizations, adapting to overseas operational expectations doesn’t happen automatically, regardless of how much both sides want the partnership to work.

This is where someone with deep on-the-ground experience, but who can also step back and communicate clearly to overseas leadership, becomes genuinely valuable. Not just someone embedded in China, but someone who understands both sides of the gap well enough to close it.

That gap is almost always wider than overseas HQs realize. And closing it starts with knowing it exists.

If you’re interested in thoughtful perspectives on China, cross-border work, and how culture, incentives, and organizations shape real outcomes, you’re welcome to subscribe to China Culture Corner and receive future posts by email.

I also share related ideas and longer-form video commentary on LinkedIn and YouTube, and post updates across the channels linked above.

If you or your organization is navigating China execution or cross-border alignment challenges, I work with teams on an embedded and remote basis. Reach out directly: Sean@SageSightConsulting.com